ICF International presents a post–American Recovery and Reinvestment Act (ARRA) outlook for the alternative fuel vehicles (AFV) industry and shares new trends related to plug-in electric, biofuel, natural gas, propane, and hydrogen-fueled vehicles. The presentation outlines the top five AFV trends as identified by ICF: 1. Demand in the medium- and heavy-duty sectors for natural gas and propane vehicles 2. Strong growth in plug-in electric vehicles supported by state and utility incentives 3. Innovation and growth in biofuels resulting from compliance markets 4. Increased awareness and adoption of third-party leasing and ownership models for alternative fueling infrastructure 5. New approaches for fleet management To learn more, view the recording of the webinar: http://www.icfi.com/insights/webinars/2014/recording-us-alternative-fuel-advanced-vehicle-trends

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Five U.S. Alternative Fuel and Advanced
Vehicle Trends to Watch
Tuesday, December 9th, 2014
11:30 a.m. EST
Erika Myers, Senior Associate
Stacy Noblet, Manager
Tom O’Connor, Principal

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Erika Myers has more than 10 years of experience in the clean
transportation, renewable energy, and environmental fields. She
provides support to clients on program and project management, policy
development, strategic planning, and analysis on a variety of clean
energy projects. Her subject matter expertise includes renewable
energy, advanced vehicles, and alternative fuels such as biofuels, plug-
in electric vehicles, natural gas, and other clean fuels.
Contact Information:
Erika.Myers@icfi.com
+1.202.862.1209

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Stacy Noblet has extensive experience in the energy, climate, and
transportation markets. She manages numerous projects that focus on
petroleum reduction in the transportation sector and alternative fuel and
advanced vehicle deployment.
Ms. Noblet provides outreach, technical assistance, research, and
program support to the National Renewable Energy Laboratory (NREL)
and U.S. Department of Energy (DOE) for the Clean Cities initiative and
the Alternative Fuels Data Center. She also works with the National
Park Service to reduce fuel use and emissions in park operations and
visitor transportation.
Contact Information:
Stacy.Noblet@icfi.com
+1.202.862.1147

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Tom O’Connor has led major projects in supply and demand outlook
and infrastructure, market pricing analysis, alternative fuels
technologies and integration, refinery capacity forecasting, and policy
impact evaluation. He has supported litigation as an expert witness and
regulatory work for U.S. federal and state entities.
Prior to joining ICF, Mr. O'Connor spent 30 years at Mobil
Oil/ExxonMobil, where he directed teams delivering more than $25
million in savings annually through refinery optimization, domestic and
international crude oil trading, risk management initiatives, and fuels
distribution and inventory management. He managed virtually all
aspects of the operational supply chain, including crude oil production
and refining, distribution, marketing, planning, and analysis.
Contact Information:
Thomas.O’Connor@icfi.com
+1.757.903.4367

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• Introduction: An Industry in Transition
• Oil, Natural Gas, and Propane Trends
• Five Alternative Fuel and Advanced Vehicle Trends
– Natural Gas and Propane Use in Medium- and Heavy-Duty Vehicle
Sectors
– Growth in Plug-In Electric Vehicles
– Innovations and Growth in Biofuels Resulting from Compliance Markets
– Increased Adoption of Third-Party Leasing and Ownership for
Alternative Fueling Infrastructure
– New Approaches for Fleet Management
• Key Conclusions
• Question & Answer
Overview

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Introduction: An Industry in Transition

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Vehicles in Use
Source: AFDC: Maps & Data, http://www.afdc.energy.gov/data/10300, EIA’s Alternative Fuel Vehicle Data

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Light-Duty Vehicle Offerings
Source: AFDC: Maps & Data, http://www.afdc.energy.gov/data/10303, National Renewable Energy Laboratory (NREL)

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Alternative Fuel Use
Source: AFDC: Maps & Data, http://www.afdc.energy.gov/data/10321, EIA’s Alternative Fuel Vehicle Data. Last updated September 2014.

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Fueling Station Availability
Source: AFDC: Maps & Data, http://www.afdc.energy.gov/data/10332, AFDC Alternative Fueling Station Locator

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Fuel Price Trends
Source: AFDC: Maps & Data, http://www.afdc.energy.gov/data/10326, Clean Cities Alternative Fuel Price Reports

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Tax Credit Summary
Alternative Fuel Infrastructure Tax Credit 30% tax credit up to $30,000 for AFV fueling equipment
Alternative Fuel Excise Tax Credit $0.50 per gallon for AFV fuels for motor vehicle use.
Alternative Fuel Mixture Excise Tax Credit
$0.50 per gallon of alternative fuel for mixtures containing
at least 0.1% gasoline, diesel, or kerosene
Biodiesel Income Tax Credit
$1.00 per gallon of pure, unblended biodiesel (B100) for
on-road use
Biodiesel Mixture Excise Tax Credit
$1.00 per gallon of biodiesel, agri-biodiesel, or renewable
diesel blended with petroleum diesel in 0.1% diesel fuel.
Qualified Two- or Three-wheeled Plug-in
Electric Drive Motor Vehicle Tax Credit
10% of the cost of qualified vehicles up to $2,500
Second Generation Biofuel Plant Depreciation
Deduction Allowance
Additional depreciation tax deduction equal to 50% of the
adjusted basis of the property
Second Generation Producer Tax Credit $1.01 per gallon for second generation biofuel mixture
Industry Adapting to Expired Federal Incentives
Source: US DOE Alternative Fuels Data Center, Expired, Repealed, and Archived Incentives and Laws
Expired 2013 Alternative Fuel Incentives

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Oil, Natural Gas, and Propane Trends

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U.S. and Canadian Oil Production Trends
© 2014 ICF International. All rights reserved.
14
U.S.
Canada
-
2
4
6
8
10
12
14
(MMbpd)
U.S. and Canadian Crude Oil Production
Sources: http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=mcrfpus2&f=m,
http://www.eia.gov/cfapps/ipdbproject/iedindex3.cfm?tid=50&pid=57&aid=1&cid=&syid=
2009&eyid=2014&freq=M&unit=TBPD
Key Trends
• U.S. oil production reached nearly
8.9 MMbpd in September 2014,
up 75% from January 2009. U.S.
oil production driven by tight oil
production, a light, sweet oil.
• Canadian oil production grew over
0.9 MMbpd between January
2009 and July 2014 (the latest
available monthly data) to 3.5
MMbpd, largely in heavy oil sands
development.
• U.S. production is focused on
North Dakota, Texas, and
Louisiana, and Canadian
production centered on the
Alberta oil sands.
• Much of the U.S. and Canadian oil
production is expected to see
continued growth, despite the
downturn in global oil prices.

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Oil Price Trends
© 2014 ICF International. All rights reserved.
15
Source: Bloomberg European Dated Brent (Ticker: Dated BFO Crude Oil Spot Px), WTI
Cushing Crude Oil Spot Px (Ticker: USCRWTIC Index).
Key Trends
• West Texas Intermediate (WTI)
prices historically at a slight
premium to Brent.
• A U.S. supply glut appeared in
early 2011, leading to severe
WTI price depression, relative
to international comparable
crudes like Brent.
• The WTI price discount neared
$30/bbl in late 2011, as new
tight oil production in from
North Dakota and other areas
became trapped at the
Cushing, OK hub.
• The WTI price discount
persists, though narrowing in
recent years as the Cushing
bottleneck has been relieved
and more recently as global
prices have plummeted.
Brent
WTI
$0
$25
$50
$75
$100
$125
$150
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14
Oil
Price
($/bbl)
Brent versus WTI Prices

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Persistent Global Oil Price Depression
© 2014 ICF International. All rights reserved.
16
Key Factors
• Increasing global
production as supply
disruptions in Libya, Iran,
and Syria have come
back online, while U.S.
production continues to
grow.
• OPEC’s recent decision
not to cut production to
increase global oil prices.
• U.S. continuing to push
out light oil imports.
• Stagnant global oil
demand, particularly as
Asian economic growth
slows.
Unplanned
Outages
(MMbpd)
U.S.
Incremental
HF Production
0.0
1.0
2.0
3.0
4.0
5.0
6.0
(MMbpd)
Global Unplanned Outages versus U.S. Oil Production
Libyan Civil
War, Arab
Spring
Libyan
militias shut
down two oil
fields
Iran sanctions, Libyan
pipeline closures by militia
groups, Nigerian pipeline
disruptions, pipeline attacks
in Iraq, Syrian Civil War
Sources: http://www.eia.gov/forecasts/steo/data.cfm?type=figures and ICF analysis
Note: “U.S. Incremental HF Production” is ICF estimate for the incremental tight oil
production made available by hydraulic fracturing (HF) and horizontal well drilling.

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Growth in Shale Gas Production will Continue to
Drive Change in North American Gas Markets
• Total gas production is
projected to increase by
nearly 2% per year.
• Conventional onshore
production continues to
decline by 2.3% annually,
while offshore production
remains relatively flat.
• Shale production provides
incremental supplies for
market growth and
replaces declining
conventional production.
– By 2025, shale gas
is expected to
account for about
two-thirds of all
U.S. and Canada
gas production.
Total U.S. and Canadian Gas Production (Average Bcfd)
17
Conventional
Onshore
Coalbed Methane
Tight
Offshore
Shale
0
20
40
60
80
100
120
140
2010 2015 2020 2025 2030 2035

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Henry Hub Gas Prices Remain Relatively Low in
the Near Term, but Increase as Market Growth
Accelerates
$0
$1
$2
$3
$4
$5
$6
$7
$8
$9
$10
2005 2010 2015 2020 2025 2030 2035
Annual Average Henry Hub Price (2012$/MMBtu)
Historical ICF Projected
Perfect Storm
Leads to
Unsustainably
Low Gas
Prices
Demand
Surge &
LNG
Exports
Ramp Up
Stable Prices –
Market Growth
and Supply
Growth in
Lockstep
Nuclear
Retirements
Spur Additional
Demand Growth
Supply
Rationalization
Cold
Winter
Spikes
2014
Gas Price
• U.S. and Canadian gas
demand growth is
expected to accelerate
in the next five years
due to new LNG export
terminals, increased
pipeline exports to
Mexico, and increased
power sector demand.
• Accelerated demand
growth is expected to
increase Henry Hub
prices to $5 to $6 per
MMBtu.
• $5 to $6 per MMBtu is
high enough to
support supply
development, but not
so high as to
adversely impact NGV
market growth.

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Outlook for Consumer Propane Demand
19
• ICF is currently projecting
relatively flat consumer
propane demand through
2020
• Demand in most
traditional consumer
propane markets is
projected to fall
– Continuing decline in
residential households
heated with propane
– Improvements in
efficiency.
• Fuel oil conversions in
the Northeast will lead to
modest growth
• Overall decline offset by
growth in internal
combustion engine
markets

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North American Propane Supply Outlook –
Production from Natural Gas Drilling
20
• North American propane
production nearly doubles
by 2025
• Roughly one-half of the
growth comes from the
Appalachian Basin
• Significant growth in
production from the
WCSB, Bakken, and
Eagle Ford
• Modest growth in propane
production also expected
from refinery production
due to changes in crude
slate

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Five Alternative Fuel & Advanced Vehicle Trends

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Propane Vehicle Forecast
Historic and Projected Propane On-Road Vehicle Sales
Source: ICF 2013 Propane Market Outlook Update
Key Trends
• 23 million propane vehicles
worldwide - 143,000 in the U.S.
as of 2010.
• Propane prices track diesel and
will remain low.
• Payback period likely to be
longer.
• ICF is projecting aggressive
growth in the number of
propane-fueled on-road
vehicles between 2012 and
2020, reaching annual sales of
more than 35,000 units per year
by the end of the forecast
period. Diesel injection engines
are expected to contribute
another 5,000 units per year by
2020.
• By 2020 over 220,000 on-road
propane vehicles consuming
over 400 million gallons
annually.

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Propane Fueling Infrastructure Projections
Historic and Projected Propane Fueling Stations
Source: ICF 2013 Outlook for Vales and Regulators in Consumer
Propane and LNG Vehicle Markets

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Natural Gas Vehicle Forecast
Key Trends
• 15 million natural gas vehicles
(NGVs) worldwide - 112,000 in the
U.S. as of 2013.
• Natural gas prices will remain
about the same - price spread will
diminish in the short-term.
• Payback period likely to be longer;
reduced incentive for fleets to make
the ‘switch’.
• There will likely be reduced growth
in the number of NGVs in the short-
term, but that as oil prices increase
vehicle sales will pick up again. EIA
modelling shows NGVs maintain
and slowly grow certain fleet
markets at oil prices in $100-
$110/bbl range. As prices move
above $110/bbl NGV market
growth is more pronounced.
• NGVs expected to comprise
approximately 10% of the heavy-
duty truck sales in 2020.
Projected NGV Fuel Consumption (Bcf/yr)
compared to Oil Price ($U.S./barrel)
Sources: Adapted from 2014 EIA AEO reference and sensitivity cases.

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LNG Fueling Infrastructure Projections
Source: Alternative Fuels Data Center, Clean Energy Fuels, Shell Oil
Company, Groom, U.S. Energy Information Administration
Projected Public and Private LNG Stations from 2013-2030

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Plug-In Electric Vehicle Sales Robust
Monthly Plug-In Electric Vehicle Sales by Vehicle, 2011-2014
Source: AFDC: Maps & Data, http://www.afdc.energy.gov/data/#10567, EIA’s Alternative Fuel Vehicle Data

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Role of Utilities and Plug-In Electric Vehicles:
Revenue Growth Potential
• PEV adoption could provide
utilities with substantial new
revenue in some areas
• Vehicle-to-grid opportunities
• Benefits for consumers:
– Time-of-use pricing
– Infrastructure rebates
– Vehicle battery buyback
programs
Source: ICF 2013 Bay Area Air Quality Management District PEV Readiness Plan
Plug-In Electric Vehicle Forecast through 2020,
Greater San Francisco Bay Area, CA
Key Trends

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Compliance Markets: U.S. Renewable Fuel Standard
Past Use of Renewable Fuels and Future Requirements of the Renewable Fuel Standard
Source: Congressional Budget Office, June 2014
a. Most of the ethanol consisted of corn ethanol, although relatively small amounts of sugarcane and other advanced biofuels were also used
b. Amounts shown for 2014 are required under the Energy Independence and Security Act of 2007 (EISA), although EPA has proposed reduced
amounts
c. The amounts of biomass-based diesel shown here for 2014 and later years reflects the minimum requirement of 1 billion gallons specified in EISA.
d. The cap on corn ethanol represents the maximum amount of ethanol that can be used to meet the total requirements for renewable fuels under
EISA.

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Compliance Markets: Low Carbon Fuel Standard
Forecast of Alternative Transportation Fuel Use for Compliance through 2020
Source: ICF 2013 California’s Low Carbon Fuel Standard: Compliance Outlook for
2020, prepared for the California Electric Transportation Coalition

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Trends in Alternative Fuel Infrastructure
Key Trends
• Fueling infrastructure is critical,
but expensive
• New interest in alternatives to
privately-owned infrastructure
• Private sector business models
include:
– Third-party ownership model
– Financing plans
– Reduced infrastructure cost with
fuel volume commitment
– Vehicle price buy-down
• Ex: Trillium will build 101 public
access Class 8 truck accessible
CNG stations by 2016 along
major interstates
• Private sector investment
depends on strength of AFV
market. Sustained low oil prices
may impact current and near-
term infrastructure deployment.
Photos courtesy of the Alternative Fuels Data Center

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Fleet Management Options
Key Trends
• Alternative and advanced
vehicles are expensive and
represent initial challenges for
many fleets
• Purchase options include:
– Municipal lease options (e.g.,
Nissan Leaf)
– Fleet Share Services (e.g.,
Zipcar)
– No- or low-interest loans to
government and for-profit
entities with payments made
through fuel savings
• Success of AFVs and advanced
vehicles will largely depend on
continued advancement of
vehicle technology and cost-
competitiveness with
conventional vehicles.
Photos courtesy of the NREL Images Database

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• ICF sees solid performance in the market and we forecast strong
continued growth in the AFV and advanced vehicle industries
• Loss of federal incentives has not resulted in major impact to the
industry, due in part to compliance markets, state incentives and
programs, and industry trends
• Declining oil prices will erode the market advantage for natural gas
and negatively impact advanced biofuels; will reduce momentum of
fleet managers to make fuel switch
• Encouraging trends include innovative financing, fleet management
options, effective compliance markets supporting alternative fuels,
and signs of growing acceptance and adoption of AFVs, especially
in niche markets
• Looking ahead, fleet managers, utilities, policy makers, and
consumers should be prepared for natural growing pains – risk
remains from unknown technological advance, fluctuations in
relative fuel price spreads, and uncertainty in regulatory support
Key Conclusions

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Questions & Contact Information
Erika Myers, Senior Associate
Erika.Myers@icfi.com
+1.202.862.1209
Stacy Noblet, Manager
Stacy.Noblet@icfi.com
+1.202.862.1147
Tom O’Connor, Principal
Thomas.O’Connor@icfi.com
+1.757.903.4367